P&KToday: P&K's Price Performance

May 13, 2016 11:20 AM

 

P&K firmed on the week.

  • DAP $85.37 below year-ago pricing -- higher 24 cents/st on the week to $489.52/st.
  • MAP $94.3 below year-ago -- higher $1.06/st this week to $502.69/st.
  • Potash $128.99 below year-ago -- higher 22 cents/st this week to $357.69/st.
  • The average cash corn price figured in to P&K this week is $3.47 1/2 per bushel.
The national average corn basis firmed 1 3/4 cent from last week to 3 1/2 cents below July futures. The national average cash corn price fell 2 3/4 cents from last week to $3.74 1/4. Basis is softer than the three-year average, which is 19 cents above futures for this week.

PhosphateIn this week's TheNFiles, we looked at fertilizer's price performance since we opted to pull the trigger for spring bookings. Phosphate bottomed several weeks after nitrogen as a result of demand discovery in a period of uncertainty. It is true phosphate prices have held firm at the top end of our fertilizer price survey, but DAP and MAP did post significant declines from their late-November highs.

From the post harvest high to the April low, DAP fell 12.1% and MAP fell 13.5%. We booked the week after the price floor was confirmed and since then, prices have edged mildly higher. DAP has firmed 1.6% and MAP is up 1.43%. This demonstrates the opposite kind of price action as we have seen in nitrogen.

In nitrogen, preplant demand is an absolute certainty. Not so much on P&K, especially phosphate. Since demand for phosphate has been so uncertain, prices have had to bow to attract buyers. That may suggest phosphate price firmness through summer, even as nitrogen falls once N demand subsides.

PotashPotash just hit a possible price floor a few weeks ago but we have only firmed a total of $1.09 per short ton. We have not issued official purchasing advice on potash and have maintained a hand-to-mouth approach through potash's price slide. That price slide in retail potash began in mid-June 2015 and comprised a $130.92 per short ton decline. That's a 26.9% decline from last summer's high.

By now, most growers who are going to book spring potash have done so already. There is very little near-term upside risk at this point so we will stay hand-to-mouth for the time being. I must point out, however, that North American potash producers have been scrambling for nearly the life of the 26.9% decline to stop the price bleed. Production curtailments were enacted but internationally, the war for potash marketshare continues and Russian producers are at the forefront of the global oversupply.

Potash supplies will rebalance eventually and we are watching closely as we suspect fall K prices may exceed today's. Key will be agreements between global exporters and China. That price sets the potash price floor from year-to-year, and when they book, we will build our potash strategy accordingly. We may find ourselves in a situation where we book sometime in June for fall applications if the market wants to firm.

Our summer outlook for P&K is sketchy at the moment. Phosphates general overpriced condition will be a limiting factor. Despite potash's current supply overhang, the possibility of rebalanced supplies globally will limit the downside in vitamin K.

By the Pound --

The following is an updated table of P&K pricing by the pound as reported to your Inputs Monitor for the week ended May 6, 2016.

DAP is priced at 50 cents/lbP2O5; MAP at 47 cents/lbP2O5; Potash is at 29 3/4 cents/lbK2O.

P&K pricing by the pound -- 5/13/2016

DAP $P/lb

MAP $P/lb
Potash $K/lb
 
Average
$0.51
$0.47 1/4
$0.29 3/4
Average
Year-ago
$0.60 1/2
$0.56 1/2
$0.40 1/2
Year-ago

 

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